You need to have your friend talk to a lawyer.

Everyone seems to want to blame the sub or supplier in these situations. It isn't his fault the guy you paid didn't pay him. You have an obligation to know the speed limit whether it's posted or not. You have an obligation to get signed lien waivers from subs and suppliers too. Ignorance of the law is no excuse in either case.

Blame the sub? For the lien? I assume exactly what you said: the GC didn't pay the sub.

Washington State Bar's model contract wording:

2.7 Lien Release. Owner shall not be required to make any payment to Contractor unless and until Contractor provides Owner with an unconditional waiver and lien release form signed by Contractor and by each subcontractor and supplier who is claiming Two Thousand Five Hundred Dollars ($2,500.00) or more in payment ...

I've wondered about this: does the GC usually pay out of pocket and then get reimbursed? That can be a big float. But otherwise, there's a chicken-and-egg: how does the GC get a lien release without paying the sub?

I've wondered about this: does the GC usually pay out of pocket and then
get reimbursed? That can be a big float. But otherwise, there's a
chicken-and-egg: how does the GC get a lien release without paying the
sub?

This is business 101. If the GC contracts for a sub but cannot manage his money well enough to pay, whether before or after he gets paid by the property owner, then it's a sign of a fly-by-night, paycheck-to-paycheck GC who shouldn;t be in business.. A lien isn't filed if the bill is 10 days late. And if the property owner isn't paying, the GC should file the lien.

It's a cash flow issue, right? I mean, if you're a big concern and have a big credit line, no issues. But what about a small GC? Do they routinely front 10K$? 100K$?

The question isn't the timing of the lien: it's the timing of the lien release. Just because a sub hasn't signed a lien release doesn't mean they have to file a lien on the due date. But once a sub has signed the release, that ship has sailed: if they didn't have the cash in hand at the signing, they've given up a major point of the release.

I'm just curious whether people actually do what WA is recommending and/or how much float a GC normally fronts.

Sorry to cause a stir. I thought it was a simple question. Guy kept aside 20%, so not a big deal. But, he was reading the statute and wondered what it meant and I didn't know either. I think it could mean 1 of 2 things. 1, Sub can only put a lien on for the difference between what the home owner paid the debtor contractor and what was held back. Or, 2, regardless of what the home owner already pain the contractor, sub can only put a lien on for the amount of the total contract between the home owner and contractor. I think it is #2. He thinks it is #1.

So sorry if this question sounded like blaming anyone. Just a question.

It means that he'd need to make sure all future disbursements go to pay the subs and that he get release at each step, when a GC starts to screw up there is no reason to believe it won't continue. He needs a lawyer....

...and possibly a new GC